UK Foster Parents Designated As ‘Unmortgageable’
Whilst the property market has run away with itself in recent years, especially during the pandemic with house prices rising over 18% since March 2020, one section of society has been unable to participate - ostracised because they are paid by the state to look after children in care.
A case study to demonstrate the problem:
Louise and Sonya Sweeney, a married couple from Huddersfield have two children and two foster children all living with them. The foster children are aged 25 and 18 and have lived with Louise and Sonya for a number of years. The birth children are aged 15 and 5.
They rented their home but wanted to buy a property instead in order to secure their tenure and to ensure that they can stay in the neighbourhood in which they want to live.
Except, they were unable to secure a mortgage. Why? Because high street banks and building societies won’t take their foster income into account when approving a mortgage.
Mortgage lenders have not kept up with societal changes and it could be argued that renters that foster are being discriminated against.
Fortunately in this particular instance a solution was found and the family have been able to purchase a home and are now settled in. But this happy outcome does not apply to hundreds and thousands of foster carers.
The solution
Louise and Sonya joined CreditLadder in October 2019 - a platform that allows tenants to report their regular rental payments to help improve their credit position. Unbelievably, this is not something otherwise recorded by the big lenders.
CreditLadder and their brokers were able to convey the couple’s good standing as tenants to a lender that actually listened - rather than the usual ‘computer says no’ attitude that prevails currently.
A very happy Louise says “After months of being rejected by brokers and us almost giving up hope of owning our own family home, we were relieved and delighted to have found this solution. However, it’s a hidden one really and worked out well for us in spite of standard lending criteria. We were able to demonstrate through CreditLadder our good track record as tenants and our ability to pay. It’s frankly incredible that traditional mortgage lenders do not otherwise consider rental payments as part of their affordability checks’.
‘All said and done, we are now home owners at last and we are over the moon. Now we all feel safe and can’t be moved on because successive landlords issue us Section 21 notices because they want to sell up”.
CEO of Creditladder Sheraz Dar adds “I’m proud and delighted that we’ve been able to assist Louise and Sonya and their four children. We’ve been able to help improve their credit position and also find a lender that takes real-life scenarios into account when assessing loan affordability, not just an outdated ‘employer salary vs expenses’ validation. The world has moved on and we are now helping mortgage customers and lenders to do that too by making rent count”.
More information on the CreditLadder business and its modern interpretation of credit can be seen here.
